Obama and Najib witness inking of three MoUs

KUALA LUMPUR: US President Barack Obama and Prime Minister Datuk Seri Najib Tun Razak witnessed the signing of several commercial deals between Malaysian and American companies worth US$2bil (Rm6.45bil) in the aviation, biotechnology and insurance sectors.

The first memorandum of understanding inked at a hotel here yesterday was for a US$1.5bil deal between GE Aviation and AirAsia X Bhd for 80E1 engines to power AirAsia X’s 25 new Airbus A330-300 aircraft.

The second was for Sime Darby Bhd to take a 30% stake worth US$30mil in San Diego-based biotech company Verdezyne.

The third MoU was for a partnership between Ambank Group and Metlife International Holdings Inc, which invested nearly US$250mil to buy shares in AmBank’s insurance units AmLife and AmTakaful, according to Bernama.

Industry experts described the deals as “a good sign”, especially given the global economic uncertainty.

“With uncertainty and uneven growth globally, they are definitely welcome,” said Alliance Investment Bank chief economist Manokaran Mottain. “Hopefully, we can see more.”

Danny Wong, fund manager at Areca Capital, viewed the tie-ups as “small steps” to push Malaysia forward and help it aim for a bigger slice of the international business space.

“The deals are definitely something positive in these times of fluid economic conditions, and are forward-looking,” he said.

Wong, who manages some RM1bil in investments, also said the MoUs would strengthen the relationship between the two countries besides sending out the signal that Malaysia is becoming more and more globalised.

US companies poured in some US$1.9bil into Malaysia for the whole of last year, putting money into 19 projects, mainly in the manufacturing sector.

American firms started to come into Malaysia actively in the 1970s, creating more than 195,000 jobs in the manufacturing sector to-date.

According to Malaysia External Trade Development Corp, the country ranked as the US’ 20th largest trading partner, 25th largest export destination. and 17th largest import source in 2013.

Malaysia, meanwhile, counts the United States as its fourth-largest trading partner.